Federal Courts and Nominations

How will Justice Amy Coney Barrett change the US economy?

Judge Amy Coney Barrett will ascend to the Supreme Court following a party-line vote days before the presidential election. What will her views on the thorniest questions of constitutional law mean for the US economy?

Reading the judicial tea leaves is no easy task. Barrett’s confirmation hearings have been a parade of questions she has declined to answer. Still, the first thing to know about Barrett is that her biggest supporters believe that she will rule in favor of the business lobby—indeed, the US Chamber of Commerce is urging senators to confirm her. The second is that she emerges from the Federalist Society, an organization dedicated to reshaping the federal judiciary that reached the height of its power under president Donald Trump.

“It’s clear that Trump and Republicans in the Senate regard her as a symbol of somebody they think is going to cement a conservative Supreme Court for decades to come,” Jonathan Entin, a Case Western Reserve University law professor who clerked for the late justice Ruth Bader Ginsburg, says. “Will she? Come back in twenty or thirty years and we’ll find out.”

It’s unlikely we’ll have to wait that long. The week after the election, the Supreme Court will consider a case brought by Republican governors arguing that taxes in the Affordable Care Act are unconstitutional, and decide if the landmark healthcare expansion can stand if that section of the law is overturned. If the ACA is cast aside, it may leave 20 million Americans without health insurance during a pandemic.

Whether that would be good for the economy depends more on your ideological preferences than any kind of empirics. Most economic analyses suggest that millions of jobs will be lost as the healthcare industry sees revenues plunge. Opponents of the ACA argue that the government should not be subsidizing healthcare or forcing insurers to provide coverage to people with pre-existing medical conditions.

Like many debates over the economy, the question of whether the ACA is “good” might depend on if you’re paying higher taxes or receiving subsidized insurance. If you measure the economy by the median income or broad-based growth, Barrett may disappoint. If you judge the economy by corporate profits and a free hand for chief executives, Barrett may be the justice for you.

Barret vs. Ginsburg

When it comes to economic jurisprudence, Ginsburg’s greatest legacy is enshrining the rights of women to equal protection under the law. Her most famous ruling forced the Virginia Military Institute to admit women, a precedent that now stands in the way of much gender-based discrimination. But not all: In a 2007 Supreme Court case over pay discrimination against women, the court ruled 5 to 4 that the plaintiff missed her chance to bring the lawsuit, based on when the salaries in question had been paid. In a dissent, Ginsburg wrote that this was an absurd standard, since the woman in question did not know that she was being underpaid until much later.

This illustrates a key difference between Ginsburg and Barrett. Legal historian Camden Hutchison says Ginsburg might consider “what are the substantive outcomes for these workers?”—that is, is it reasonable to expect a working woman to determine that she is being underpaid relative to her male peers and bring a lawsuit within 180 days of receiving a paycheck? “Barrett is not going to take that approach,” Hutchison says.

In just three years as a federal judge after a career in academia, Barrett has written few rulings on controversial business issues. The bulk of her writings are unanimous rulings with her colleagues on the US Court of Appeals for the Seventh Circuit—but only two of those 10 active colleagues were nominated by Democratic presidents. Legal analysts argue (pdf) that “time and again Judge Barrett has sided with corporate and employer interests even when consumers and workers had the text of the law and precedent on their side.”

One notable case is Wallace vs. Grubhub, a class-action suit where drivers for the national food delivery company sought to be recognized employees, rather than independent contractors, and become entitled to overtime pay. The case hinged on a procedural detail—drivers had signed agreements requiring any dispute with Grubhub be handled in private arbitration, not public courts. There is a federal law exempting national transit workers from arbitration agreements, but Barrett ruled that though Grubhub is a national business, its local delivery people were not engaged in interstate commerce—a win for their employer.

In a different case also concerning local delivery drivers for a national delivery company, Barrett ruled that drivers were engaged in interstate commerce, which this time meant they could not sue for overtime pay because of a rule limiting the hours of long-haul truckers.

Lawyers Quartz spoke to said the rulings were technically sound, but noted that Barrett interpreted one statutory exemption narrowly when it benefitted a business, and another quite broadly—when it benefitted a business. The public may find it strange that American workers making deliveries are engaged in inter-state commerce or not depending, apparently, on whether that means they get paid overtime.

“Barrett is very conservative, and if she’s appointed, she will move the court in a more conservative direction on business law issues in general,” Hutchison says. “The only wrinkle to that is Ginsburg, outside of the labor and employment area, has not been a hugely progressive jurist.”

The US Chamber of Commerce has won ten of fifteen cases it brought before the Supreme Court in the last year, and 70% of cases since 2006, after Federalist Society members John Roberts and Samuel Alito joined the high court. In this sense, Barrett replacing Ginsburg is unlikely to represent a major change: The US legal establishment tends to favor corporate interests, and Ginsburg, beyond her pioneering work on discrimination, was not outside that mainstream.

The line between philosophy and politics

Barrett’s nomination represents decades of effort by the Federalist Society to ensure this establishment position is enshrined in a 6-3 majority on the high court.

The legal group was founded in 1982 by conservative attorneys, and is traced back to a broad effort to protect the “American economic system,” in the words of future Supreme Court Judge Lewis Powell. The Federalist Society has received millions of dollars from wealthy donors like Charles Koch, the late Richard Mellon Scaife, and the Mercer family, who pushed for policies to limit government intervention in society.

The society says its commitments are philosophical: They are proponents of textualism, which maintains judges should only draw conclusions from the text of legal statutes, and originalism, which says judges must interpret statutes as their authors did, and not be influenced by historical context, empirical analysis, or consideration of the substantial outcome of a case.

Barrett’s academic career and her work with the society is dominated by these themes. At an online Federalist Society panel focused on her judicial philosophy, attorney Ryan Walsh discussed Barrett’s fealty to this notion by explaining how justice Antonin Scalia, for whom she clerked, forbade his assistants from reading legislative histories, arguing that such context is unreliable compared to statutory text. “There are footnotes in briefs that I worked on as a Supreme Court clerk that I have never read because they contain legislative history,” he said.

Critics say this approach puts judges in the position of imagining what the drafters thought instead of making rigorous arguments. Interpreting the US founding is not simple task, as the new interpretations offered by the musical Hamilton and the New York Times’ 1619 project show.

It’s no coincidence that race is at the center of all these discussions. Originalists face a difficult challenge from Americans who point out that the founders would not see Black or LGTB citizens as deserving equal treatment under the law. Progressive originalists argue that fidelity to the Constitution demands taking its history seriously—particularly the history of the post-Civil War amendments that scholars argue amount to a second founding.

“Too many conservative originalists privilege the Constitution as it stood in the 18th century, when slavery was tolerated, many injustices ran rampant, and broad democratic exclusion reigned,” say Elizabeth Wydra, president of the Constitutional Accountability Center.

The Federalist Society acts as an education and professional networking organization, but it is most famous as a tool for vetting judges appointed by Republican presidents. Under Trump, the vast majority of nominated judges have been members of the Federalist Society—a long-time Society executive and prolific dark money fundraiser, Leonard Leo, took a White House job supervising judicial nominees.

A spokesperson for the society says it takes no position on Barrett’s nomination. Behind closed doors, Leo offered more candor about how the Federalist Society approaches judicial nominations. The choice of Supreme Court justices might be seen by the public as driven by legal expertise and wisdom, but for Leo it is about remaking the courts to achieve conservative political aims.

“We’re going to have to understand that judicial confirmations these days are more like political campaigns,” Leo said in a 2019 speech describing his work, and reported by the Washington Post. “We’re going to have to be smart as a movement.”

Fear of 6-3

When it comes to economic rulings, one fear voiced by populist critics is that Barrett, whose academic work suggests she may be more radical than her originalist predecessor, might hobble key precedents that undergird the government’s regulatory power.

Of particular concern is a legal test known as Chevron deference, which mandates judges give leeway to federal agencies like the Environmental Protection Agency when they interpret statutes. For years, Federalist Society members and industries facing regulatory burdens have argued that this deference should be overturned in favor of stricter interpretations that would limit the decision-making power of civil servants. Ironically, the 1984 Supreme Court decision that created Chevon deference reversed a ruling made by Ginsburg, then a judge on a lower federal court.

Entin and other legal researchers suggest that Chevron deference is likely to be restricted by a more conservative court, but not eliminated entirely, since doing so would invite lawsuits challenging any regulatory decision, paralyzing government and the courts. More likely are standards demanding more rigorous explanations from agencies about how they make decisions. One example is the DACA ruling authored by chief justice John Roberts that effectively preserved the right of undocumented immigrants brought to the US as children to stay because the Trump administration failed to follow appropriate procedures in changing the policy.

A 6 to 3 conservative majority on the highest court, however, activates the deepest fear on the left: An end to the 20th century precedents that codified the government’s ability to regulate the economy. This is known as post “Lochner-era” jurisprudence, after a ruling that said New York state’s limits on bakers’ working hours violated their right to enter into free contracts, which was effectively overturned in the 1930s.

Some of the Federalist Society’s biggest backers say that this is their goal. Asked about these decisions during her hearings, Barrett suggested judges should not overrule legislatures based on their own policy preferences.

This also raises the discussion of Barrett’s views on hot-button issues. Her anti-abortion views are well known, but not always considered in the context of the economy: The debate over Roe v. Wade is focused on the rights of women to control their own bodies, but there is evidence that access to safe and legal abortion also improves women’s labor force participation and overall economic growth.

At her hearings, Barrett did not betray many hints of how she might rule on challenges to Roe or other issues. Yet it was significant to hear what she thought of as safe to weigh in on—the evidence that smoking causes cancer, or how the coronavirus spreads—and what she thought was too controversial to touch—the overwhelming scientific consensus on climate change or whether voter intimidation is a federal crime. (It is.)

It must be said that justices can surprise the people who appoint them—Ginsburg was viewed skeptically by liberals at the time of her nomination, and then became a “Resistance” culture icon. Roberts saved DACA and the Affordable Care Act in rulings that disappointed conservatives, while Gorsuch wrote the opinion for a landmark 6-3 ruling that protected transgender Americans from workplace discrimination on textualist grounds.

The same could be true of Barrett—that her corporate supporters are wrong to believe her judicial philosophy will benefit them. Hutchison believes that “Barrett, like many justices, is less politically motivated than a lot of people seem to think.”

Yet it’s asking a lot of the public to believe that Barrett is both a neutral interpreter of the law, and someone who has no qualms about the backing of the partisan financiers and political operatives at the Federalist Society. We are asked to believe she was chosen for her legal skill and experience, though she has been a judge for only three years and her work is little-cited by her peers.

Investors make bets, and they have bet millions on Barrett to carry their preferences through. Would you bet against them?